If someone has power of attorney, can they execute a document that they will profit from ?

UPDATED: Oct 1, 2022

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If someone has power of attorney, can they execute a document that they will profit from ?

My niece has power of attorney over my parents.. her husband is a realtor not a
very good one , and she got my parents to list the property in their estate
which will be left to their 3 daughters, with her husband. There is a shopping
center complex, mini storage facility, office building, subdivision lots, also
other building lots elsewhere. The nieces husband also receives commissions off
of rentals in the office building. Is this not a conflict ? Is it legal for
someone with POA to execute a document that they will profit from ?

Asked on January 15, 2019 under Estate Planning, Virginia


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

The issue is not whether they are profiting, but whether the transaction, agreement, document, etc. is a good one for your parents. IF this were a good transaction for your parents, the fact that your niece may also profit as well is irrelevant. But if this is not a good one for them, so that she is putting her own interests ahead of their interests or profiting/benefiting at their expense, then this would be a violation of the "fiduciary duty," or duty of loyalty, that an agent or attorney-in-fact (person given power by the POA; either term may be used) owes her principal(s) (person[s] giving her the power). As such it would be illegal. If your parents (if they are still mentally competent, and you do not mention incompetence as an issue) deem this a bad transaction, etc,. for them, they could challenge it in court to invalidate it. They can--and should--also negate or revoke the POA. But again: if they are mentally competent, they have to do this--you can't challenge this on their behalf. 

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